Nordstrom’s e-commerce bet pays off big

Over $1 billion in direct sales. That’s what Nordstrom raked in according to their fiscal year 2012 report, a first in the company’s history. Overall sales grew by 12.1 percent year-over-year with e-commerce achieving an impressive 37 percent growth. Those numbers put Nordstrom 4.8 percent ahead of comparable retailers according to Internet Retailer. Why the success?

Understanding that if it wanted to avoid teetering on the brink of extinction, like big box dinosaurs JC Penny and Sears, it would have to invest major resources to cater to online consumers. It is why Nordstrom bet $150 million on infrastructure improvements. Those improvements included:

UI features like search, navigation and checkout

Updated recommendations

Mobile site and app upgrades

360-degree video on certain web site product pages

50 percent expansion of product availability and selection

“(Ecommerce) is our fastest-growing channel and it is expanding our reach to existing and new customers. We see substantial opportunities for outsized growth to continue as we further improve the online customer experience,” said company president Blake Nordstrom during the company’s latest earnings call.

Mobile also played a big factor — driving $260 million in sales in 2012. Perhaps even more impressive is that the numbers released by Nordstrom did not include the totals for trendy fashion site HauteLook, which the company acquired in 2011.

The dividends have paid out in more ways than just revenue for the company. According to Xtreme Labs, Nordstrom’s app, first launched in 2011, was ranked as 3rd highest rated retail app on Android devices. Staying connected with the consumer is one of the many reasons Nordstorm also made Fortune’s most admired companies.

Comments

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http://www.facebook.com/brant.williams Brant Williams

Nice work Kirk at team!

http://www.facebook.com/JasonCharles01 Jason Greenberg

Funny that they call JC Penny and Sears “dinosaurs”, Nordstrom’s was wise to invest in their E-Commerce before it was too late, they are benefiting from all device sales including mobile and expanding into app-land as well, changing as the times change to stay afloat. Next I will expect increase sociability of their site including loyalty programs/gamification and more advanced and interactive social media communities. Interested to see this growth, the range of these tools can be seen here; http://bit.ly/VccB1t.